On June 23, 2022, Thailand’s Securities and Exchange Commission (SEC) opened a public hearing period on regulatory controls for initial coin offering (ICO) portals that serve as financial advisors to digital token issuers. The proposed measures aim to prevent conflicts of interest; allow ICO portals to outsource certain functions; and establish additional notification obligations for ICO portals.
The public hearing is open for general comments until July 23, 2022, and the new legislation is expected to be issued soon after that. During the public hearing period, any interested parties can comment on the SEC’s proposed principles. The key proposed points are outlined below.
Conflicts of Interest
Similar to SEC-approved financial advisors for securities offerings, ICO portals must be clear of conflicts of interest when representing issuers in a coin offering. According to the draft regulation, the following conflicts of interest are prohibited:
Outsourcing ICO Portal Functions
To increase efficiency, ICO portals will be allowed to outsource certain tasks, subject to the following conditions:
Additional Notification Obligations
To facilitate additional supervisory control, ICO portals will have to notify the SEC within 15 days if there are any changes to their qualifications, personnel, and functions, or if the ICO portal is unable to maintain the necessary qualifications or comply with the requirements detailed in the relevant section of SEC Notification No. GorJor. 16/2561 Re: Criteria, Provisions, and Procedure for Approval of an ICO Portal Service Provider. In the notification, the ICO portal must identify the cause and report on any remedial measures planned or already taken.
If an ICO portal wishes to suspend operations, it must also notify the SEC and provide a list of unfinished tasks along with a plan to mitigate any potential impact on customers. When the ICO portal wishes to resume operations, it must again notify the SEC and explain how it has resolved the issues that caused the suspension of operations, along with any significant changes to the portal’s characteristics.
Tilleke & Gibbins will continue to monitor these ICO portal regulations and provide updates as needed. For more information on any aspect of digital asset business, cryptocurrency, digital tokens, or digital asset regulations in Thailand, please contact Kobkit Thienpreecha at [email protected], Onunya Chanpen at [email protected], or Sorawit Partomtanasarn at [email protected].